The article discusses the abuse of the employee retention credit (ERC) during the COVID-19 pandemic and the challenges faced by the IRS in processing legitimate claims. The IRS has issued multiple warnings about ERC abuse and misleading claims made by promoters. As of March 3, 2023, over 866,000 employers had filed ERC claims totaling over $152.6 billion. However, the IRS still faces a backlog of amended returns. To address the issue, the IRS is increasing audits and investigations related to ERC claims, targeting businesses and promoters involved in fraudulent claims. The IRS Criminal Investigation has initiated 122 investigations involving potentially fraudulent ERCs. Lenford Smith, a CPA, and Lauren-Nikai Harry, a tax attorney, have firsthand experience with the backlog of ERC payments for their clients. They highlight the challenges small businesses face in navigating the ERC requirements and the risks posed by unscrupulous promoters. The ERC is a refundable tax credit available to businesses that continued paying employees during the pandemic, and the IRS advises businesses to work with tax professionals to avoid audit risks associated with potential ERC abuse. For more information click the link!